Oil flows off Palawan

MANILA, Philippines – (UPDATE 4) President Gloria Macapagal-Arroyo has announced the extraction of fresh oil off Palawan.

"The President is pleased to announce, as reported by Energy Secretary Angelo Reyes, the extraction of fresh oil from the Galoc oil field in the northwest offshore of Palawan at 10:45 am today [Thursday]," Executive Secretary Eduardo Ermita told a press conference.

“The President is optimistic that this new development will positively impact on the administration's efforts to reduce the country's annual oil importation of US $6 billion, and in turn will also contain the increasing cost of food and other commodities," said Ermita, reading from a prepared statement.

He also said that this could translate to $1.4 billion in foreign exchange savings for the Philippines.

Ermita said the President described the oil from the Galoc field as “light, medium crude oil, with a potential high yield of light ends, such as gasoline.”

Ermita said the discovery, to be called Palawan light, was made at 10:45 a.m. Thursday and was put on board a Philippine vessel at 11:20 a.m. to be brought to local refineries.

Ermita said subject to further studies, the Galoc oil field is expected to yield from 10 million to 20 million barrels of oil a day, or about six percent of the national demand of 300,000 barrels a day.

The volume of extract confirmed early production targets of 17,000 to 20,000 barrels of oil per day in the first 90 days of operation, said Ermita.

A consortium of foreign and Philippine companies, called Galoc Production Co., is a majority shareholder in the oil field. Otto Energy Limited of Perth, Australia, an international exploration and production company, has a 31.28 percent stake in the consortium.